U.S. apparel cos. lawsuit (re Saipan)

The island of Saipan is in the US Commonwealth of the Northern Marianas Islands (CNMI). Beginning in the 1980s, many clothing manufacturers had their garments made in Saipan because such items could be labelled “Made in the USA” and subsequently exported to the mainland US exempt from tariffs or quotas. However, the CNMI charter allows the islands to make their own immigration and labour laws, exempting them from the majority of US federal immigration and labour regulations. The workforce for garment manufacture is predominantly migrant labour from Asia.

In 1999, three separate lawsuits were filed in US state and federal courts against numerous American retail apparel companies and Saipan-based garment factories. The two federal lawsuits were filed in California and the CNMI, and each lawsuit was a class action claim filed on behalf of 30,000 foreign garment workers working in Saipan. The California federal lawsuit alleged that the defendants had engaged in unlawful conspiracies regarding involuntary servitude and criminal peonage prohibited by the Racketeer Influenced and Corrupt Organizations Act and the Anti-Peonage Act. The California federal lawsuit also made claims of forced labour and deprivation of fundamental human rights under the Alien Tort Claims Act. The CNMI federal lawsuit alleged breaches of the Fair Labor Standards Act (related to required, unpaid overtime) and CNMI laws relating to minimum wage and workplace rights.

The third lawsuit was filed in California state court. This action, brought by a garment workers’ union, alleged unfair business practices under the California Business and Professions Code claiming that the public was being deceived because the garments were being advertised as “sweatshop free”. This lawsuit also alleged that the human rights of the foreign garment workers in Saipan had been breached because the conditions in which they worked amounted to forced labour and involuntary servitude.

In 2004 all three cases were brought to a close with a $20 million settlement that included 26 retail companies and 23 Saipan garment factories. The parties agreed upon a code of conduct, independent monitoring, and monetary compensation as part of the settlement. Levi Strauss was the only company that did not agree to the settlement; the plaintiffs voluntarily dismissed their action against Levi Strauss in order to effect the settlement. Levi Strauss resisted the settlement arguing that it had already adopted a far-reaching factory monitoring program and had a stringent code of conduct for all of its manufacturers. The company said that any clothing made on Saipan during the time in question was made at factories which complied with Levi’s code of conduct (it stopped purchasing clothing made on Saipan in 2000).

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The island of Saipan is in the US Commonwealth of the Northern Marianas Islands (CNMI). Beginning in the 1980s, many clothing manufacturers had their garments made in Saipan because such items could be labelled “Made in the USA” and subsequently exported to the mainland US exempt from tariffs or quotas. However, the CNMI charter allows the islands to make their own immigration and labour laws, exempting them from the majority of US federal immigration and labour regulations. The workforce for garment manufacture is predominantly migrant labour from Asia.

In 1999, three separate lawsuits were filed in US state and federal courts against numerous American retail apparel companies and Saipan-based garment factories. The two federal lawsuits were filed in California and the CNMI, and each lawsuit was a class action claim filed on behalf of 30,000 foreign garment workers working in Saipan. The California federal lawsuit alleged that the defendants had engaged in unlawful conspiracies regarding involuntary servitude and criminal peonage prohibited by the Racketeer Influenced and Corrupt Organizations Act and the Anti-Peonage Act. The California federal lawsuit also made claims of forced labour and deprivation of fundamental human rights under the Alien Tort Claims Act. The CNMI federal lawsuit alleged breaches of the Fair Labor Standards Act (related to required, unpaid overtime) and CNMI laws relating to minimum wage and workplace rights.

The third lawsuit was filed in California state court. This action, brought by a garment workers’ union, alleged unfair business practices under the California Business and Professions Code claiming that the public was being deceived because the garments were being advertised as “sweatshop free”. This lawsuit also alleged that the human rights of the foreign garment workers in Saipan had been breached because the conditions in which they worked amounted to forced labour and involuntary servitude.

In 2004 all three cases were brought to a close with a $20 million settlement that included 26 retail companies and 23 Saipan garment factories. The parties agreed upon a code of conduct, independent monitoring, and monetary compensation as part of the settlement. Levi Strauss was the only company that did not agree to the settlement; the plaintiffs voluntarily dismissed their action against Levi Strauss in order to effect the settlement. Levi Strauss resisted the settlement arguing that it had already adopted a far-reaching factory monitoring program and had a stringent code of conduct for all of its manufacturers. The company said that any clothing made on Saipan during the time in question was made at factories which complied with Levi’s code of conduct (it stopped purchasing clothing made on Saipan in 2000).

American retailers remain sharply opposed to joining an international plan to improve safety conditions at garment factories in Bangladesh as their European counterparts and consumer and labor groups dismiss the companies’ concerns about legal liability. A few shareholders at Gap’s annual meeting this week questioned the company’s refusal to sign on to a plan that commits retailers to help finance safety upgrades in Bangladesh, where 1,127 workers died when the Rana Plaza factory building collapsed on April 24…Whether the new accord would subject retailers to substantial legal risks has been debated since nearly three dozen European retailers embraced the plan last week while almost all major American companies shunned it. [also refers to Wal-Mart, Nordstrom, Target, Associated British Foods, H&M]

EarthRights International (ERI) has reviewed the June 2010 report “Think Globally, Sue Locally,” by Jonathan Drimmer for the U.S. Chamber of Commerce Institute for Legal Reform...“Think Globally” is riddled with errors that betray the bias of the Chamber and undermine the report’s conclusions...The basic observation underlying “Thinking Globally” is sound: companies that are sued for serious human rights and environmental abuses will often face public education and advocacy campaigns in addition to the litigation. This should not be surprising; what is objectionable, rather, is Mr. Drimmer’s insinuation that campaigns are somehow manipulated or controlled by litigators to compel companies to settle weak cases case for their own financial gain. The report is so riddled with errors of fact and logic that the conclusions that it draws from this observation are anything but sound.

Late Monday, on the eve of trial in New York, the parties settled in Wiwa v. Shell. For those with longer memories, it was reminiscent of March 2005, when another case hyped as the great breakthrough for corporate human rights, Doe v. Unocal, settled before trial on the merits…Absent a cathartic trial, can a winner be declared?...While the facts in dispute will never be settled, Wiwa has left its mark on law and legal culture -- and in this respect the movement for business human rights is the big winner. [also refers to Chevron, Curacao Drydock, Esmor Correctional Services, Drummond, Gap, Yahoo!]

As the American industrial base continues to erode...more and more consumer goods are manufactured by foreign labor, often under conditions of slavery, indentured servitude and child labor...In the best of times, only so much can be accomplished for human rights through litigation. The courts are slow, evidence irretrievable, assets unavailable. So here's another idea: let the market work, a fully and accurately informed market. A "right to know" approach already has been successfully used to improve environmental protection.

...after a decade of denying any wrongdoing, companies such as Nike and Gap are now admitting that their workers have been exploited and abused, and have pledged to improve the conditions [refers to steps taken by Nike, Gap, Levi Strauss]...despite some companies' repentance and reforms, other top-name brands are still using sweatshops. Among those on the target list of campaigners are Tommy Hilfiger, Umbro and Fila [part of Sport Brands International].

It is possible to hold business entities accountable for international crimes...but the problem of jurisdiction remains a barrier to international prosecution...Domestic courts are possible venues for assessing liability of companies operating
abroad...especially through the doctrine of complicity. [refers to Talisman, Rio Tinto, Unocal, Shell, Chevron (part of ChevronTexaco), ExxonMobil, Freeport-McMoRan, Cape plc]

...good business leaders are increasingly recognizing the importance of sustainable, socially responsible business practices as a key to effective management of their businesses and their bottom lines...Sustainability is fast becoming a critical component of the [legal] diligence and deal making process...lawyers should have a seat at the sustainability table because they...are trained to anticipate risk, legal and otherwise, and to build structures and programs that minimize or eliminate such risks. [refers to Kasky v. Nike lawsuit (USA) re claims about labour conditions]

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